King & Roberts (a)
12 Pages Posted: 14 Jun 2009
Abstract
This case follows the valuation and negotiation process Wally Camp underwent. The (A) case starts with a description of the business and Wally's assessment of the problems with its current management. Then the case describes the valuation of the company's assets and ends with a valuation decision.
Excerpt
UVA-G-0358
KING & ROBERTS (A)
Walter J. (Wally) Camp, a former faculty member of the Darden Graduate School of Business Administration, was looking for a job in the private sector when he discovered that King & Roberts, a specialty snack distributorship in Charlottesville, Virginia, was selling its Wise division. Excited about the prospects of owning his own business, Wally researched the company, met with the owners, and learned that the asking price for this division was $ 280,000. However, this did not include accounts receivable, inventory or the real estate.
Wally believed the price was way too high. He had reviewed the financial results for King & Roberts, and on Thursday, March 27, 1988, set about calculating his own offering price and price limit for negotiations. The next day, he would make his offer to Corbet King, the 72‑year‑old, 95% owner of King and Roberts, and his 40‑year‑old son, Steven King, the 5% owner.
King and Roberts History
Originally, King & Roberts had distributed Wise products, candy, novelties, beer, and wine. Around 1980, however, the Roberts side of the enterprise broke away from the business, taking the alcohol distribution with them, moved up the street, and named its business King and Roberts Distribution Company. The remaining business, King & Roberts, distributed Wise products, candy, cookies and novelties until 1988 when the owners decided to sell the Wise division. This division constituted roughly one‑half of King & Roberts' gross sales and its territory covered a 50‑mile radius around the Charlottesville area, and extended west to West Virginia.
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Keywords: communication process, communication strategy
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